Ready, Set, Trade!


Jun 01, 2024


Sarah Parsons Wolter


Jun 01, 2024


Sarah Parsons Wolter


In a historic shift, Wall Street has officially transitioned to T+1 settlement, shortening the time it takes to finalize stock trades from two days to one. This change, aimed at reducing counterparty risk and enhancing market liquidity, marks the most significant adjustment in trade settlement in over a century.

This shift is crucial for the future health of markets, representing a long-sought victory for regulators. By lowering trading costs and making the settlement process more efficient and reliable, it enhances the overall market infrastructure. The move to T+1 settlement will encompass stocks, corporate bonds, exchange-traded funds, mutual funds, and options.

However, this transition will require significant adjustments from US market participants. International investors, who hold approximately $27t in American markets, may struggle to source dollars on time and global funds will move at different speeds compared to their assets. Additionally, without proper solutions, financial institution staff relying on legacy processes will likely face increased pressure to meet tight deadlines, potentially raising the risk of mistakes due to human error.

As the rest of the world’s stock markets adapt to this new speed, one can't help but wonder: will international authorities keep up or will it all look a bit like the commodities trading pit in “Trading Places” when Winthorpe yells "Sell 30 April at 142!"


Portfolio News

Flutterwave named ‘Fintech of the Year’ at the African Banker Awards - Congratulations to portfolio company Flutterwave for this recognition, which highlights the company's contributions to the financial technology sector and its unwavering commitment to fostering economic growth and financial inclusion across the African continent. Read more

Can Flutterwave conquer Rwanda's e-payment market? - Flutterwave, a leading fintech platform renowned for its robust payment infrastructure for global merchants, has set its sights on the Rwandan market. CNBC Africa spoke to Leah Uwihoreye, Regulatory Affairs Manager, Flutterwave for insights on the company's strategic plans and potential challenges in Rwanda. Read more

Ready, Set, Trade!

Wall Street aces big T+1 test with no rise in failed trades - Data released by the Depository Trust & Clearing Corp. show the “Fails Rate” recorded in its Continuous Net Settlement system — a platform that aims to minimize the exchange of securities between counterparties by netting off trades — was 1.90% on Wednesday. That compares to a daily average of 2.09% last week, before new rules halved the time allowed to complete every transaction to a single day. Read more

Faster settlements may add pressure on FIs to automate - The T+1 implementation for capital markets went live in the U.S., Canada and Mexico this week. Against that backdrop, financial institutions are under increasing pressure to automate their existing manual processes and take the appropriate steps to ensure their underlying technology and operations are able to handle the new realities of the compressed settlement environment. Read more

Wall Street returns to T+1 stock trading after a century - The switch to the system known as T+1 — abandoned in the earlier era as volumes became unwieldy — is ultimately intended to reduce risk in the financial system. Yet there are worries about potential teething issues, including that international investors may struggle to source dollars on time, global funds will move at different speeds to their assets, and everyone will have less time to fix errors. Read more

Industry News

PayPal is planning an ad business using data on its millions of shoppers - The digital payments company plans to build an ad sales business around the reams of data it generates from tracking the purchases as well as the broader spending behaviors of millions of consumers who use its services, which include the more socially-enabled Venmo app. Read more

PwC set to become OpenAI’s largest ChatGPT enterprise customer - PwC said it would roll out ChatGPT Enterprise, the version of ChatGPT aimed at large companies, to its 75,000 U.S. employees and 26,000 U.K. employees, totaling over 100,000 licenses for the artificial intelligence product. Read more

Capital One and Walmart end exclusive credit card agreement - This announcement follows a federal judge’s ruling in March that Walmart could end its credit card partnership with Capital One early because the bank did not provide the level of service required by the companies’ 2018 agreement. The judge ruled that “repeated customer service failures” allowed Walmart to end the partnership. Read more

BlackRock now runs the world’s largest bitcoin fund - For years, GBTC was the world’s largest bitcoin fund, with assets in the fund peaking at about $44b in November 2021. However, investors have pulled nearly $18b from the fund since it converted into an ETF in mid-January. Nine newly launched bitcoin ETFs by Wall Street asset managers including BlackRock and Fidelity Investments have raked in over $30b since then. Read more

Fintech N26 says regulatory action cost it ‘billions’ in lost growth - Years of regulatory action against German fintech N26 for its poor anti-money laundering controls may have cost the business billions of euros, co-founder Valentin Stalf told the FT, as authorities finally remove a cap on its growth. Read more

WeWork cleared to exit bankruptcy - A U.S. bankruptcy judge approved WeWork's Chapter 11 bankruptcy plan, allowing the shared office space provider to eliminate $4b in debt and hand the company's equity over to a group of lenders and real estate technology company Yardi Systems. Read more

IRS plans to make its free tax filing program permanent - The IRS is continuing to expand its free tax filing program, Direct File, announcing this week that the pilot program will be made permanently available starting next year — and all 50 states and Washington D.C. are invited to participate. Read more

Starling investor targets £10b valuation for digital lender - UK digital bank Starling could fetch a valuation of close to £10b within the next few years as it rolls out its banking software globally for lucrative fees. Read more

Select Financings

Anzen Finance - San Francisco based stablecoin company raised $4m in Seed funding led by Mechanism Capital and Circle Ventures. Read more

Babylon - Decentralized Bitcoin staking protocol raised $70m in growth funding led by Paradigm. Read more

Banktrack - Spain based SME treasury management platform Banktrack raised €2m in Seed funding led by Kfund. Read more

CBiGroup - San Antonio based global transfers company raised $15m in Series A funding led by Alpol Capital Family Office. Read more

Cloover - Berlin based climate company raised €104.8m in growth funding led by Lowercarbon Capital. Read more

Coinflow - Chicago based payments startup raised $2.25m in Seed funding led by CMT Digital. Read more

Ducky - Nashville based AI automation tool raised $2.7m in pre-Seed funding led by Penny Jar Capital. Read more

Félix Pago - Miami based remittance startup raised $15.5m in Series A funding led by Castle Island Ventures. Read more

Frich - New York City based Gen Z financial app Frich raised $2.8m in Seed funding led by Restive Ventures. Read more

Kintsugi - San Francisco based sales tax automation startup raised $6m in Series A funding led by Link Ventures. Read more

Light Frame - Providence based wealthtech company raised $1.7m in pre-Seed funding led by ATX Venture Partners and New Stack Ventures. Read more

Marketnode - Singapore based digital market infrastructure firm raised $19m in Series A funding led by HSBC and its existing shareholder Temasek. Read more

Plume - San Francisco based Layer 2 real-world-asset startup raised $10m in Seed funding led by Haun Ventures. Read more

Relay - Toronto based SMB cashflow management solutions company raised $32.2m in Series B funding led by Bain Capital Ventures. Read more

Supervizor - Paris based accounting automation company raised €20m in growth funding led by Orange Ventures. Read more

Switchboard - Miami based decentralized oracle company raised $7.5m in Series A funding led by Tribe Capital and Rockaway X. Read more

ZTLment - Copenhagen based decentralized money transfer startup raised €2.4m in pre-Seed funding led by Upfin and Giant Ventures. Read more


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